Legal & Regulatory News

NGFS publishes revised set of climate risk assessments

On the 7 September 2022, the Network for Greening the Financial System (NGFS) published the third iteration of its climate scenarios for central banks and supervisors (the NGFS Scenarios).

The NGFS Scenarios have been developed to provide a common starting point for analysing climate risks to the economy and financial system. They have been created as a tool to shed light on potential future risks, and to prepare the financial system for the shocks that may arise. The NGFS Scenarios are not forecasts: instead, but instead explore future potential scenarios for the purposes of financial risk assessment.

The revisions to the NGFS Scenarios include the following:

·         new economic and climate data, policy commitments and model versions are used;

·         estimates of GDP losses from chronic risks more fully account for model uncertainty;

·         acute physical risks included for the first time via the integration of stochastic shocks; and

·         acute physical risks were included for the first time via the integration of stochastic shocks.

Click here to view the revised NGFS Scenarios.